'Lack of talent' hampers progressive procurement

AXA’s CPO for Northern, Central and Eastern Europe predicts procurement will become a centre of “spending intelligence” for organisations but a lack of suitable talent is frustrating the transformation.

Heinz Schaeffer told SM that within AXA, which only set up its procurement function seven years ago, purchasing was becoming increasingly sophisticated and moving away from a mere transaction management service.

“My view is that procurement in the future will go under a different name altogether such as ‘performance advisor’ – one that reflects its commercial value,” said Schaeffer.

However he said there was a shortage of suitable professionals in the field to bring about the change.

“The big question is do you have the right people on board? This can vary in different cultures. I have the right people in Germany, for instance.” He added that this was not the case in Belgium, where AXA took over the Royale Belge bank, an institution with old-style procurement methods.

Schaeffer said that while he believes the current crop of graduates are more able to handle complex commercial issues than their counterparts of 10 or 15 years ago, they are some way from having the suitable experience to push through the changes he is describing.

“You also need people with leadership abilities to drive through change. That is difficult knowledge to acquire from university - you’ll only get it from an operational background,” he added.

Schaeffer also highlighted the need to focus on more than just cost: “Sometimes value cannot be measured in the contract. It might lie in high responsiveness, for example,” he said.